You cannot make the next instalment to the developer: what your options are

A developer payment plan looks convenient at the outset, and it commits you to a schedule running years ahead. In that time a buyer's income, currency and plans can all change. Here is what happens on a missed payment and what can be done.

What formally happens

Failing to pay on time is a breach of contract by the buyer. The usual sequence is: notice of default, a period to remedy it, then the developer's right to initiate termination. On termination the developer retains a portion of what you have paid, at a level that is regulated and depends on the stage of construction — the further the build has progressed, the more is retained.

The money does not disappear entirely, but the losses are substantial, and they grow the later in the project the default occurs. That is the opposite of most people's intuition, which assumes the risk is worst at the start.

Three routes better than default

• Reschedule. Developers renegotiate plans far more readily than they terminate, and overwhelmingly more readily with a buyer who raises the problem before the due date rather than after it. This is the single highest-value action available and it costs a phone call.
• Assign the contract. Selling to a new buyer, even at a loss on paper, almost always recovers more than termination. Check the minimum percentage paid before assignment is permitted and the developer's fee for it.
• Bring in a partner. Less common, but a co-buyer taking over part of the remaining schedule is a real route in a project you still believe in.

What to do first

Read the contract before making the call: the notice period, the remedy period, the deduction scale and the assignment conditions. Going into a rescheduling conversation knowing precisely what happens if it fails is what produces a workable outcome.

How to avoid being here

At purchase, model the schedule against your income with a margin, and specifically model the completion payment — the largest single instalment and the one most often assumed away on the basis that the property will be sold before it falls due. If the plan only works if you sell before handover, you have not bought a property on a payment plan; you have taken a leveraged position with a deadline.